The MOM’s latest employment health-check predicts a change in the landscape that HR will need to navigate over the next five years
In it’s annual health check on employment, the MOM said softer economic conditions meant employment growth had slowed in the first half of 2015.
The MOM said that HR managers should not expect the market to mirror the one they have become used to over the first five years of this decade.
“For the rest of this decade, we expect employment to grow at a slower pace than in the last five years,” the Ministry of Manpower said in the statement.
The MOM put the prediction down to more gradual rises in the resident labour force in Singapore, as well as the continued restructuring of the economy.
The overall employment rate rose from June 2014 to June 2015, largely due to the strong employment gains seen during the second half of 2014.
The employment rate for residents aged 25 to 64 rose to 80.5% in June 2015, from 79.7% a year earlier. Meanwhile, unemployment decreased for those aged 25 to 29 and those in their 30s and 40s, but increased for those aged 50 and above as well as non-degree holders, due to slower employment growth.
The MOM said employers had seen strong median income growth across the economy in the year to June 2014 due to tight labour market conditions.
The nominal median monthly income of full-time employed residents rose by 4.7 per cent to $3,949 in June 2015, when employer CPF contributions are included. With inflation accounted for, real median income growth was 5.4 per cent.
Real income growth has been sustained over five years, growing by 3.1 per cent per annum at the median and 2.1% per cent per annum at the 20th percentile, meaning that lower income workers were also benefitting from growth.
Analysts told Channel NewsAsia this wage growth may not be sustainable.
"Wage growth has outpaced to some extent GDP growth and productivity growth in the last couple of years," Sim University’s Dr Walter Edgar Theseira said.
"I think going forward, especially since most predictions are that GDP growth will be quite muted in the next decade, we may have to adjust to a period of perhaps more modest wage growth going forward,” he said.